Lord Howarth of Newport: My Lords, this Bill should not have been placed before Parliament in the state it is in. For all the work of the Silk commission, of which the noble Lord, Lord Bourne, was a distinguished member, three successive Secretaries of State, pre-legislative scrutiny of a draft Bill and then scrutiny of this Bill by the House of Commons, it is a mess. It is confused and opaque. The opacity is not just because this legislation is not consolidated, although it is very unhelpful that that is the case. The Bill is based on no discernible constitutional principles. It expresses no clear or convinced vision for Wales or for the United Kingdom or for the relationship between the two. With the fractures exposed by the EU referendum, such a vision has never been more needed.
The Bill is not the product of a concordat between the Governments of Wales and of the United Kingdom. It will not fulfil the aspirations of the people of Wales for full law-making powers vested in the National Assembly as expressed in the referendum of 2011. It will not,
“put Welsh devolution on a stable footing for the long term”,—[Official Report, Commons, 14/6/16; col. 1644.]
which at Second Reading the Secretary of State described as the ambition of Ministers. There is a lack of ambition here for Wales. Rather than seeking to provide for Wales devolutionary parity, or near-parity, with Scotland and Northern Ireland, Ministers have tried to get away with the minimum they can. Power, instead of being shared generously between England and Wales, is being grudgingly contested in a zero-sum game.
My noble friend Lord Hain famously said that devolution is a process, not an event. The process to which this Bill will consign us will be one of frustration for Wales, legal uncertainty and continuing friction. Yet another round of legislation—a fifth go—will soon be needed. That phrase, “a new constitutional settlement”, which the noble Lord, Lord Bourne, used in his peroration—is peculiarly inapplicable to this measure.
The Secretary of State insists that his underpinning principles in preparing the Bill have been clarity and accountability. Whatever accountability there may be for the Welsh Government if they should avail themselves of the new power to vary rates of income tax, there will  be no clarity in the absence of a commitment by the Government of the United Kingdom to extend the minimum funding pledge beyond this Parliament and to compensate for the loss of European payments to Wales following Brexit. Without that commitment the Government of Wales are being offered a pig in a poke. Why would they impose an income tax increase on the hard-pressed people of Wales when the Chancellor’s response may be to cut the grant to Wales? I think we should reflect very carefully on the thoughtful speech in this regard about the fiscal framework by the noble Lord, Lord Crickhowell. This Government, like their predecessors, are too scared of Scottish voters to reform the Barnett formula, so they are leaving Wales disadvantaged while giving a meaningless new power to the Welsh Government. They are also scared of Welsh voters and are reneging on their manifesto promise of a referendum in Wales on devolution of powers to raise income tax.
While providing extensions to the legislative powers of the National Assembly, the Bill does not concede a distinct legal jurisdiction for Wales. The noble Lord, Lord Bourne, set his face emphatically against that in his speech. Here I part company with the noble Baroness, Lady Bloomfield, whose maiden speech I enormously enjoyed and admired. After more than 15 years of devolution there is now, as the Bill recognises, a substantial body of Welsh law that has been created within Wales. That body of Welsh law will grow with use of the powers to be newly devolved. Already there are practical problems, with English counsel and judges being insufficiently versed in the parallel corpus of Welsh law. The Ministry of Justice and the courts in England are more than hard pressed to deal with the challenges they face in England alone. It is not sustainable to have two legislatures making law in one jurisdiction. The time has come at least to legislate to provide the ability to accord to Wales the respect and dignity of having its own jurisdiction.
My noble friend Lady Morgan of Ely was generous in her assessment of important aspects of the Bill. She described it as a considerable improvement on the provision for devolution that has so far been in place. Of course we should be grateful for the small mercies that the Bill does provide: powers to develop small ports and small energy projects, and control over aspects of transport and environmental policy as well as over equalities policy and arrangements for elections. While I welcome the Government’s conversion to the reserved powers model of devolution, the version offered in this Bill is, frankly, absurd and insulting to Wales. A studied vagueness in the drafting makes it impossible to be sure of the precise number, but the new Schedule 7A contains 190 or 200 reserved powers—different noble Lords have totted up different totals. Whatever the total may be, it is vastly more than the powers reserved in relation to Scotland. The imprecision of the schedule makes it inevitable that the two Governments will again have to resort to the courts to rule on what precisely is devolved. After the agricultural wages saga, that is what sensible people want to avoid.
It appears that the Wales Office ignored the advice of the Welsh Affairs Committee that it should issue guidance to other Whitehall departments as to the principles and considerations that it should apply in  deciding what powers it wished to reserve, and instead has accommodated a dog-in-the-manger stance department by department. The Secretary of State claims that there is a clear rationale for each of the reservations, but what constitutional principle causes the Government to refuse to devolve to an experienced and—as the noble Lord, Lord Bourne, acknowledged—mature Welsh Assembly powers over crime, public order and policing, including specifically such matters as anti-social behaviour, knives, drugs and prostitution? If the Home Office thinks it has a monopoly of wisdom, nobody else does. These are responsibilities devolved to Scotland and to be devolved to city regions in England. Why not to Wales? There is no principled basis for this reservation; it is simply a case of the Home Office saying, “What we have, we hold”.
If the Welsh Government should wish to improve access to justice—fundamental to a liberal society—by reversing some of the UK Government’s disgraceful cuts to legal aid, why are they forbidden to do so? On what principle is Wales not to be allowed competence in the licensing of entertainment or the sale and supply of alcohol, or for betting and gaming? Why should Wales not take responsibility for its own sins? If Wales wishes to be virtuous, why is it not entitled to take that decision? What about advertising, charities or adoption services? Do we need uniform policies on such matters across England and Wales? Are Welsh legislators unfit to determine them for Wales? If Wales can take charge of its planning policy, for what good reason will it not be allowed to determine its own policy on the community infrastructure levy? How can it make sense to separate competence for the two? Why on earth is policy on industrial development in Wales reserved to Whitehall and Westminster? The noble Lord, Lord Bourne, spoke of the responsibility of the Government of Wales to ensure that the Welsh economy performs well.
If the National Assembly is to determine electoral law for Welsh elections, why is it to be precluded from exercising powers in relation to the funding of political parties—an issue which, lamentably, for many years politicians at Westminster have failed to grasp? Since, pace the Secretary of State, the rationale for these and large numbers of other reservations is not clear, we may have to table amendments to delete each reservation individually, so that in the debate on each one the Minister can explain the reason. My noble friend Lady Morgan may or may not seek to strong-arm me to prevent me doing that, but she will have a good wrestle.
It is not just that Whitehall begrudges reasonable freedoms for Wales. Even as the Government are slashing parliamentary representation of Wales at Westminster, they are taking powers from the Welsh Assembly. Bizarrely, in a measure paraded as taking devolution a stage further, Whitehall is actually retracting devolved powers. This is partly because so-called silent areas, where hitherto powers were not specified or were specified ambiguously, and Wales exercised them de facto, are now included in reservations. Of course what the noble Lord, Lord Elystan-Morgan, had to say about the judgment in the Supreme Court in 2014 is highly pertinent here. It is also partly because the vague drafting of reservations, by reference for example  to the “subject matter” of large amounts of preceding legislation, enlarges the scope for reservation. With better, more precise drafting, the reserved powers model could have been introduced with no diminution of Assembly competence. As it is, Assembly competence is reduced in regard to, for example, aspects of employment rights and criminal offences against young people, as well as through the tests of competence in new Schedule 7B on modifying the law on reserved matters and Minister of the Crown consents. All this is helpfully discussed in the excellent report of the Constitutional and Legislative Affairs Committee of the Assembly, on which the noble Lord, Lord Elis-Thomas, served. The Bill gives with one hand while it takes away with the other. It gives new meaning to the phrase “take back control”. The Minister should at least tell the House which powers the government are deliberately removing from Wales and why, and which powers they are removing inadvertently.
Brexit is a new ghost at this devolutionary feast. We now have before us a huge agenda of repatriation of European Union law to the United Kingdom, and then of examination and modification of its components. It will not be enough for the Government and Parliament in London to handle all this on behalf of Wales. The Government of Wales must be a champion for Wales, and the Assembly must play its part in legislation for Wales. The Bill began its passage through Parliament before 23 June, and Clause 19 on implementation of EU law does not appear to meet the point. How will the Government reframe their devolution policy to take account of Brexit?
I have been severe about the Bill because bad law will make good government in Wales more difficult. We must seek, in consultation with the Assembly, and as far as possible consensually in this House, to improve the Bill.

Lord Elis-Thomas: My Lords, it is a particular pleasure for me to be sandwiched between two Secretaries of State to whom I owe a great debt of gratitude. I worked with the noble Lord, Lord Murphy, twice, when he returned as Secretary of State in my period as Presiding Officer of the National Assembly in Cardiff. The noble Lord, Lord Hunt, who is to follow—I am merely a warm-up act for him—gave me my first public appointment, without which I would probably not be standing here today. He stands guilty as charged.
This has not just been reminiscence therapy for former Secretaries of State. All the contributions we have had from all noble Lords who have spoken have been a relevant contribution to today’s discussion. Those contributions show up the inadequacy of where we are now compared with where we were when we started. The lack of progress in the last 20 years and more, during my political life in the Assembly and in other places, is something that distresses me about this Bill.
I am not one of those “capital N” nationalists, as my colleagues often find to their chagrin. I used to call myself a Welsh European devolutionist autonomist but I am not sure whether one can use the adjective “European” any more in this House. The constitutional development of Wales is something that I have always sought to promote and to work for, often with great difficulty. Sometimes the context was not there and the politics were not right. However, I think that we should have got further than we have at this stage. It is for that reason that my latest contribution as an Assembly Member and a Member of the Constitutional and Legislative Affairs Committee of the National Assembly at the end half of the previous Assembly, and at the moment, has been an attempt to influence the debate in a new way.
We are not supposed to call ourselves noble friends across the House, but the noble Lord, Lord Bourne, who was a great friend of mine when I worked with him in the National Assembly and who is still a great friend, knows that what we have developed in the Assembly is a legislative body of competence and with the ability to scrutinise in the same way that Parliament does. The Constitutional and Legislative Affairs Committee will meet later this week with a committee of this House to discuss these issues.
We have gone on at quite some length in this debate but I want to speak briefly about the constitutional principles that concern me and about where we are and why we have not been able to do better at this stage of our devolution pilgrimage, if I can say that, following on from the noble Lord, Lord Elystan-Morgan.
The Constitutional and Legislative Affairs Committee has Bills referred to it by the Business Committee of the Assembly. We operate in a similar way to other Assemblies and Parliaments. When we got this latest Bill we had already done work on the previous draft Bill. We took serious evidence. We opened a public  consultation in June of this year and completed it in September and took serious evidence from the most learned legal opinion we could gather together on the constitution in Wales. All this evidence is in the committee’s report. I know that some noble Lords have already read it. My noble friend was complaining that it was not a parliamentary paper. I am not sure whether the Assembly Commission, although I am no longer in charge of it, has the resources to provide all its papers free and in print form. We are, of course, a paperless, digital Assembly, so all Members who do not have a copy can see me later and I will tell them how to print it off the Assembly website. I see that the noble Lord has already done so, and I am grateful to him for that.
We held the consultation, took evidence and had a stakeholder event in which petitioners were involved. The online platform is still there. That was an attempt to consult in the widest possible way, and we produced this report. I signed up to the report with sadness, because I thought that we should have done better.
We will come back to these issues in Committee and on Report, and there will be amendments. The early clauses of the Bill talk about the permanence of the National Assembly, but I want to know what the legal force of that is. What is the legal force of saying that an institution is permanent? We are here in transient times—we have the great 1662 prayer book, and Prayers at the beginning of our day. We know that we are transient, so what does it mean to legislate for permanence? Even more conflicting and difficult for me is the further clause recognising Welsh law. I am proud to have studied medieval Welsh law at the University of Bangor. I was taught by various scholars, so I know that there is such a thing as Welsh law, because I studied it. Suddenly, we are legislating in Parliament assembled to recognise such a thing as Welsh law. Professor Richard Rawlings is one of the most distinguished constitutional lawyers and persons who has studied devolution, and he told our committee that the clause was a “shocker”. It demonstrates the problem of trying to do something symbolic when you do not really want to do anything at all. I am not saying that that is the Government’s intention, but that is how it has been interpreted by the academic lawyers that we consulted.
I was grateful to my noble friend Lord Murphy for referring us back to the Wales Act 1978, which became the basis, in a reformed way, of the 1998 Act. That Act was an attempt to legislate in a way that did not recognise the clear difference between a legislature and a Government, although we did not use those words in those days. But now we have the reserved powers model, which has been much heralded to be the solution of devolution in perpetuity—yet we have reserved powers plus reservations or exemptions, which is exactly where we were before. For 12 years, which was probably too long, I worked as Presiding Officer, deciding the competence of legislation; it was all about ensuring that it was in the competence, which meant that we had to take decisions about where the boundaries were of the devolution settlement. Clearly, conferred powers with exemptions take us to the same place as reserved powers with further exemptions. So where are we 200 exemptions further down the road? There is no  clarity and no constitutional intelligibility here. In particular, where is the intelligibility for the citizen and the electorate? This is what this is about—it is about writing the law of Wales in such a clear way that the people of Wales, in taking decisions about their political life from day to day, will understand what it means. We are nowhere near that.
Having spent all these years trying to legislate in this place and Cardiff, I stand here knowing that I have failed to deliver a reasonable constitutional system for the country that I sought to represent. That is not my fault and not the fault of the present Minister, nor the fault of the parties here. We have been labouring in this vineyard for many years—but there is a failure to realise that Wales deserves better than the present treatment within the family of nations of the United Kingdom. If we are a home nation, it is time that we came home.

Lord Morgan: My Lords, the history of Welsh devolution has been a very tortuous one. Since 1999, it has not been a straight run down the piste but a series of slaloms—but we are making progress erratically, and this Bill takes us further. It has a good deal of cross-party support, although that might not have been apparent from what we have heard in the past few hours. As other noble Lords have said, progress owes a great deal to the Minister, a man I have always regarded as a,
“good deed in a naughty world”,
to quote the Bard, perhaps because he was trained in Aberystwyth, although it was slightly before my time there.
Most of the discussion has been around the two main features of the Bill—the reserved powers aspect and the provisions over income tax. I shall deal with those fairly briskly, as so many of the points have already been made. It is profoundly right and long overdue that the Parliament—or, to quote my noble friend, the Senedd—should have reserved powers and not conferred powers. A very strong case for that was made by the Silk report, on the grounds of clarity. It is also important to give greater authority to the Welsh Assembly comparable to Scotland and Northern Ireland. I have never understood why the Welsh Assembly and Government did not have reserved powers from the beginning. We have now got them, although, as noble Lords have said, with a number of limitations.
The Bill has been criticised for its complexity and contradictions. As other noble Lords have done, I welcome many of its features. It is very good to remove the notorious necessity test, which caused a great deal of lack of clarity. I welcome the greater powers and welcome very much the extension of devolution to energy and transport and the running of elections. On the other hand, as noble Lords have said, there are all these many restrictions. As a historian I find it slightly ironic that a measure designed to extend devolution in so many ways goes back on our history. I see that one of the reserved powers is the supply, distribution and sale of liquor. As I tried to explain in a book of mine that appeared—oh dear—52 years ago, and which is still on sale in Aberystwyth in all good bookshops, the principle was admitted in  1880  of the Welsh Sunday closing Act. That is to say, there was a legislative principle accepted for Wales and, accorded through that, the pubs could or should close on Sunday. All these many years later, that is reversed, which is very ironic.
As many noble Lords have said, a lot of progress needs to be made in Committee in that regard. It just shows that over the decades the constitutional and political status of Wales has been unequal. That is what an asymmetrical devolution means—it means that Wales is unequal, and does not have the status in its Assembly or its political authority that the other Celtic nations have.
There has been a lot of discussion about levying income tax. I am all in favour of Wales having the power to levy its own income tax, as Silk recommended. It seems to me, to reverse the famous phrase, you cannot have representation without taxation.
It is unsatisfactory to have your funding based on money that comes from somewhere else that you grumble about, in this case Whitehall and the Treasury. The Labour Party and the Government in Cardiff—and I entirely understand this—have been very critical of many features of this, particularly the fact that it will be yoked to the Barnett formula. They would like to see that removed before Wales has its own income tax: they will have to wait a very long time. The formula was a temporary stop-gap by our dear friend the late Lord Barnett in 1978. There is nothing more permanent than a temporary stop-gap and so it has been with the Barnett formula. I do not particularly like the idea of another referendum. As we have seen with Brexit, the last thing you have with a debate of that kind is a sensible discussion of constitutional and financial principles. There would be lots of wrangling in the press about whether income tax would go up or down and that is all you would have: it would be intellectually worthless. However, the Welsh Government and the Constitution Committee have expressed concerns, so I hope the Minister can give assurances that the overall funding will not suffer and that, in particular, the Welsh Government will have the power to extend their borrowing powers in due course.
I want to talk mainly about three other things. First, it is very important that Wales should have its own legal judicature. It has legislative powers but not a legislative system. We have a growing corpus of Welsh powers coming into being, but we have no structure. There should be a distinct Welsh legal jurisdiction to, among other things, avoid institutional conflict. Again, it is ironic how we have gone back on history. We did rather better under Henry VIII, God rest his soul, than we do now. His Act of Union, as the noble Lord, Lord Elystan-Morgan, will know, created Welsh courts—the Courts of Great Session, which disappeared in 1830. Otherwise, Wales suffers badly in this. We have no designated supreme court to pay attention to Welsh matters as there is for Scotland. There is an administrative court in Wales, but that is all. Otherwise, the Welsh legal system is administered through London. Therefore we find that Welsh law made in Wales and the wider English and Welsh law administered through the judicial system in London are applied to precisely the same areas of policy. At some stage this is bound to reach  confusion and conflict. If you do not take my word for it, there is rather more powerful evidence from, for example, the late Lord Bingham, who spoke very positively in favour of this principle. We have also had very supportive remarks from the Lord Chief Justice. Since his name is Lord Thomas of Cwmgiedd, that may explain his particular way of looking at things.
We do not want a separate Welsh legal system. We are not talking about independence for Wales but devolution: a different political complexion. A separate system would be anomalous and very expensive, but we should and could have a distinct jurisdiction as they do in Scotland, Northern Ireland, the Isle of Man, Jersey and Guernsey. Why not Wales? Why should Wales not have a system which would enable Welsh citizens to feel close to their law and which reflected their deeply felt identity as a nation?
I have two final points. I agreed very much with the peroration of the speech by the noble Lord, Lord Crickhowell: the union. I declare an interest as a member—like the noble Lord, Lord Hunt—of the Constitution Committee. Our report, which the noble Lord, Lord Crickhowell, kindly quoted, was about the union and devolution. This is again an example of piecemeal devolution. I am not criticising the Government particularly on this. It has been happening repeatedly since 1999. Where is the overarching statement of principle about the result of a change of this kind in relation to the union? We reported on this and, as I said previously, a virtue has been made of asymmetry. I do not think it has virtue: it is a way of demeaning Wales. I hope that the Minister, in his response, or the Government, when we look at the Bill at a later stage, can explain the organic relationship of this measure within the overarching union which we wish all these devolution measures to reinforce, not undermine.
My very short final point is that it would be very important to clear up all these issues before we have Brexit. Brexit will have a major impact on Wales in almost every aspect: in agriculture, education, industry, and almost every feature you can think of. It is crucial to have constitutional clarity within the United Kingdom and between all its governmental institutions before the iron curtain comes down.